Young Adults May Pay Big Share of Health-Care Reform's Cost

By Shailagh Murray
Washington Post Staff Writer
Wednesday, September 16, 2009

As health-care legislation advances through Congress, the young adults who were so vital to President Obama's election are emerging as a significant beneficiary of his top domestic priority, but they are also likely to play a major role in funding any reform.

In a campaign-style rally Thursday at the University of Maryland at College Park, Obama will aim to tap his richest vein of support -- voters younger than 30 -- to help sell his reform plan to a more skeptical general public. "We're at an important turning point in our push for real reform," read the e-mailed invitation, "and it's critical that we seize this moment."

A 2008 study by the Urban Institute found that more than 10 million young adults ages 19 to 26 lack health insurance coverage. For many of those people, health-care reform would offer the promise of relatively inexpensive individual policies, which do not exist in many states today.

The trade-off is that young people would no longer be permitted to bet on their good health: All the reform legislation before Congress would require individuals to buy at least minimal coverage.

Another bill will be introduced Wednesday by the chairman of the Senate Finance Committee. Sen. Max Baucus (D-Mont.) will offer in it a proposal to keep premiums manageable: a bare-bones catastrophic policy that would protect young people from financial calamity while providing basic preventive care.

Drafting young adults into any health-care reform package is crucial to paying for it. As low-cost additions to insurance pools, young adults would help dilute the expense of covering older, sicker people. Depending on how Congress requires insurers to price their policies, this group could even wind up paying disproportionately hefty premiums -- effectively subsidizing coverage for their parents.

An array of Democratic senators continued to complain Tuesday about the affordability of reform, insisting that the final package should include much larger tax credits to help people cover the cost of insurance premiums.

"I want to make clear that in its current form I cannot put my support behind the Finance bill -- it will not have my vote," said Sen. John D. Rockefeller IV (D-W.Va.).

In part, young adults are uninsured because they are less likely to work for employers who offer coverage; they may not qualify for public programs such as Medicaid; and even the skimpiest private insurance plans may be too expensive alongside hefty student loan payments and credit card debt.

But some young people -- nicknamed the "young invincibles" -- are also likelier than other Americans to assume that they won't need health insurance or to decide that they'd rather spend their money on other things.

To discourage that attitude, the Finance Committee bill would fine individuals who do not purchase coverage. An early draft of the proposal set the penalty at $750 or $950 per year for single people, depending on income. But according to various insurance experts, even the least expensive plan under the bill could cost more than $100 per month, making it cheaper for people to pay the fine than to buy insurance.

All the bills seek to blunt the additional cost to young adults, mainly through subsidies, but it is not clear what effect that would have. "The primary question is what the premium is and what people get for that," said Mark McClellan, director of the Engelberg Center for Health Care Reform at the Brookings Institution and a former senior Bush administration official.

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